Value key to Dunelm 5pc sales growth

RETAIL chain Dunelm bucked a weaker homewares market by reporting like-for-like sales growth of five per cent for the past half-year. The same-store sales improvement in the 26 weeks to June 27 compared with growth of 2.3 per cent seen after the first 17 weeks of the trading period.

RETAIL chain Dunelm bucked a weaker homewares market by reporting like-for-like sales growth of five per cent for the past half-year.

The same-store sales improvement in the 26 weeks to June 27 compared with growth of 2.3 per cent seen after the first 17 weeks of the trading period.

Dunelm said its `simple value for money' offering, with average transaction values of around £25, helped it cope with tough trading conditions.

Chief executive Will Adderley added: "The homewares market has declined in the last 12 months, but, having said that, consumer spending does not yet appear to have been squeezed to the extent that many commentators were anticipating."

Dunelm, founded in 1979 as a market stall business, employs more than 5,000 full and part-time staff.

Among its current stores are outlets in Trafford, Stockport, Rochdale, Radcliffe and Warrington. Last year, Dunelm paid £5m for the Manchester-based bed linen brand Dorma . Since then, it has invested in dedicated Dorma zones in some of its branches around the country.

With six openings achieved in the financial year to July 4, the group now trades from 82 superstores and 12 older format high street shops and has said it aims for 150 superstores eventually.

The new additions meant total sales grew by 10.7 per cent in the half-year, resulting in total sales of £423.7m for the financial year - a gain of 8.1 per cent.

Dunelm said the sales improvement also reflected more `special buys' and the opportunistic purchasing of additional local media advertising. Margins improved over the financial year, it added. Mr Adderley said he saw many areas for the company to keep improving, but warned trading conditions were likely to remain tough.

He added: "Although spending may hold up for a little while yet, the prospect of increasing tax burdens on consumers and the possibility of a return to higher mortgage costs, mean that we remain cautious in our outlook."